Quantitative Tightening

Quantitative Tightening (QT) is a monetary policy tool used by central banks to reduce the amount of money circulating in the economy. They do this by gradually selling off or not reinvesting the assets they previously purchased, such as government bonds. This process decreases liquidity, which can help control inflation and prevent the economy from overheating. Essentially, QT is the opposite of Quantitative Easing (QE), aiming to tighten monetary conditions, stabilize prices, and maintain economic balance.